AN EXAMINATION OF THE ACCURACY OF SMALL MANUFACTURER CHIEF EXEC
Peterson, Robin T
Journal of Small Business Strategy; Spring/Summer 2005; 16, 1; ABI/INFORM Complete
pg. 41
AN EXAMINATION OF THE ACCURACY OF
SMALL MANUFACTURER CHIEF EXECUTIVE OFFICERS
IN ASSESSING THE LEGALITY OF SELECTED ACTIONS
Robin T. Peterson
New Mexico State University
[email protected]
ABSTRACT
This inquiry investigated the degree offamiliarity of CE.Os of small manufacturing .firms
with federal regulations. Important findings were that the managers, especially those
employed by firms producing industrial goods, were deficient in their familiarity with the
terms of government regulations and could benefit from the acquisition ofji1rther insights.
Implications and suggestions/or the C.E. Os. are provided.
There are constraints on hiring, promoting
employees, supervisory practices, safety,
raising capital, accounting methods, financial
reporting, advertising, pricing, dealing with
suppliers, dealing with competitors, and
numerous other activities (Black, 2003;
Stanley, 2003; Peritz, 2002; Ballam, 2000;
Moorhouse, Morris, & Whiples, 1999).
INTRODUCTION
Top managers of small manufacturing firms
should be cognizant of the major federal
laws which impact them. Research suggests
that they perceive their organizations as less
law abiding than do lower-level managers
(Petrick, Scherer, Wendt, & Cox, 1994).
However, it is possible that some C.E.O.s
mistakenly perceive the depth of their
knowledge of this subject and incorrectly
assume that they can assess which actions
are congruent with the law and which are
not. If this condition exists, these managers
are placing themselves in a position of
exposure to potential prosecution with all of
the associated ramifications (Debbie, 200 I).
Given these circumstances, top managers of
small manufacturing companies may benefit
through becoming aware of the level of their
legal knowledge of federal laws.
Modifications in the laws and the manner in
which they are interpreted over time can
insert ambiguity in the perceptions of small
manufacturing company C.E.O.s. These
changes can be very difficult to predict
(Stock, 2003). Those who do research in this
area often discover that their predictions
must be continually updated (Audretsch,
Baumol, & Burke, 200 I). Experience
indicates that shifts in the regulations may
necessitate continual surveillance of the
federal level legal processes. Some fields
that have witnessed recent modifications in
the regulations include restrictions on price
offers and promotions (Sinha, Chandra, &
Srinvasan, 1999), bribes in international
transactions (McCubbins, 200 I), wage and
hour
regulations
(Thompson,
2003),
overtime regulations (Nicolai, 2003),
Small manufacturers face a formidable and
continually shifting body of federal law
which influences their actions. The laws
exert an effect on a wide range of company
activities (Hamel, 2003; Posner, 1997).
41
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Journal o[Small Business Stratef!)'
Vol. 16, No. 1Spring/Summer2005
deception of consumers (Waterson, 2003),
and communications among competitors
(Gilliland & Manning, 2002).
producers of industrial and consumer goods.
Evidence has shown that federal authorities
are more likely to prosecute consumer than
industrial goods marketers (Lashgari, 2003).
It follows that managers in this sector would
go to further lengths to become aware of the
law than industrial goods producers.
Executives who are employed by small
manufacturers must contend with a
formidable burden imposed by legal matters.
Regional and local managers who have
positions with larger enterprises are not
directly responsible for many of the actions
that the federal government monitors.
Accountability for these is centered at the
corporate or division level. However,
managers in smaller companies tend to be
of
charged
with
a
wider
range
responsibilities since there are fewer
numbers of specialized personnel on the
payroll.
Further,
large
manufacturing
company executives often have access to
specialized attorneys who are employed or
retained by the employer. This favorable
circumstance is less common in smaller
enterprises. The various regulations impact
many different business actJv1ties, are
occasionally
vague,
and
may
have
formidable ramifications for the company.
(Edlin, 2002). Thus, managers should stay
acquainted with these restraints and the
manner in which federal officials administer
them. Manufacturers should understand the
law in order to preclude consequences such
as fines, damages, injunctions, undesirable
out-of-court settlements, and legal fees.
A sample of CEO's of small manufacturing
firms received a listing of activities and was
requested to assess the list and to indicate the
degree to which they perceived each one to
be legal or illegal. The analysis also assessed
the extent to which these perceptions were
accurate or not.
The study was directed at two hypotheses.
These were as follows:
H 1: Chief executive ofjicers of small manufacturing companies will be able to
accurate~v ident!fj1, as legal or illegal,
fifty percent or more of a list of
activities that are potentially illegal.
It is reasonable to expect that numerous
C.E.0.s of small manufacturers are aware of
the fact that federal regulations impact many
of the actions they undertake in performing
their work (Debbie, 2001) and that failure to
comply with the regulations can result in
undesirable consequences (Joyner, Payne, &
Raiborn, 2002; Williams & Barrett, 2000).
Hence, there is considerable incentive for the
C.E.0.s to familiarize themselves with and to
act in conformity with these regulations
(Petty, 1999; Gilliland & Manning, 2002).
Top managers of small manufacturing firms
cannot be charged with the responsibility of
being familiar with all of the federal laws, of
course (Zane, 2002). Instead, attorneys who
are under the employ of, or are retained by
the firm, should be accountable for this
function. Conversely, managers are well
advised to possess a general knowledge of
the more fundamental laws and legal
precedents and to be aware of conditions
where it is necessary to consult attorneys
(Delaney, 1999).
The more than fifty-percent accuracy
criterions specified in the hypothesis derives
from the proposition that this proportion is
the most neutral percentage available and, by
default, demarks the mid-point between what
might be construed as "naive" on the one
hand and "knowledgeable" on the other. This
criterion has also been employed in previous
studies of the ability of managers to assess
the legality of business activities (Peterson,
1998).
The study described herein assessed the
degree to which a sample of chief executive
officers of small manufacturing companies
could accurately discriminate between a
number of legal and illegal activities. It also
examined differences in cognizance of
legality between managers employed by
H2: Chief executive officers ofsmall manufacturing companies selling consumer goods will be more accurate
than their counterparts that sell
42
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Vol. 16, No. 1Spring/Summer2005
Journal o(Small Business Strategv
inducement for C.E.O.s of firms in the
consumer goods sector to become cognizant
of legislation which might affect them.
industrial goods in assessing the
legality of a set of activities that are
potentially illegal.
THE STUDY
Research studies have identified differences
in managerial practices and learning insights
among managers of firms producing consumer versus industrial goods (Lilien, 1987).
These suggest that business markets are
different from consumer markets in terms of
their characteristics and influences, decision
processes, and relationships (A vlonitis &
Gounaris, 1997). These findings also suggest
that inter-industry differences could arise in
the knowledge of federal law.
Cover letters and accompanying questionnaires were forwarded to fifty randomly
selected professors, one in each state, who
taught a small business institute or similar
course. The sample frame was the
Membership Directory: International Councilfor Small Business (2002). The professors
were selected from the directory, and if they
taught a relevant course and elected to
participate in the survey, they received a
packet of 10 questionnaires to be distributed
to C.E.O.'s of small manufacturing firms five industrial and five consumer goods
producers - in their geographical area. Many
of these were past or present clients of small
business institute or similar programs.
Industrial goods companies deal with a
smaller number of customers, suppliers,
intermediaries, and other parties than do
consumer goods firms (Gummesson, 1999).
In turn, the industrial goods firms rely
heavily upon developing relationships with
their constituencies, where reliance is upon
trust and focus on constituency needs, and
are less upon involvement in interactions that
depend upon legal enforcement (Gounaris &
Avlonitis, 2001 ). These concerns focus less
on individual transactions and more upon
developing permanent relationships. It is
logical to expect that industrial goods firms
will show greater responsiveness to longterm orientations of existing and potential
constituencies by adopting a long term
perspective in handling and dealing with
them.
One week prior to receiving the
questionnaire, each manager was mailed a
postcard that asked for participation in the
study and announced that a professor would
soon
deliver
a
questionnaire.
The
instructions were to complete the questionnaire and to mail or fax it back to the
professor. This effort yielded a total of one
hundred and sixty-five returned questionnaires. A follow-up postcard and a second
questionnaire were sent to managers who did
not respond. This second wave yielded
seventy-nine additional usable completed
questionnaires. Hence, the final sample size
was 244 - a response rate of 48.8 percent.
Research indicates that regulation tends to be
more extensive and intensive for industries
which are associated with a high level of
public concern ((Banerjee, Lyer, & Kashyap,
2003). Consumer goods industries, of course,
are comprised of companies that provide
products to and interact with members of the
public through functions such as promotion,
pricing, and merchandising. In addition,
industrial goods finns place less reliance
upon advertising - a highly regulated
function - in their marketing strategies than
do consumer goods producers (Simkin,
2000). Thus, it can be expected that public
concern is substantial for this sector.
The manufacturers were asked to indicate if
fifty percent or more or their revenues
emanated from (A) consumer or (8)
industrial goods in order to allocate the
respondent to the appropriate industry
grouping. The sampling efforts yielded 162
consumer and 82 industrial goods producers.
The questionnaire employed in the study
outlined twenty activities that managers
employed by small manufacturing companies might undertake in their daily
activities. These activities emanated from a
prior study of retailer perceptions of legality
(Peterson, 1998) and from a content analysis
of chapters relating to regulation, social
Taking these various factors into account, it
becomes apparent that there is substantial
43
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Journal of Small Business Strategv
Vol. 16. No. I Spring/Summer 2005
responsibility, and ethics in five top-selling
management policy textbooks.
The data in the table indicate that the
respondents, as a group, misclassified the
legality of eight activities:
Half of the activities are violations of federal
laws or have been so interpreted by the
courts. These activities are defined in the
appendix. In tum, the definitions were
provided to the respondents, so that they
might comprehend the exact meaning of each
one. The second half of the activities were
not violations of federal laws, although some
small manufacturer C.E.O.'s might perceive
them as being unethical. These legal
activities are also described in the appendix.
•
•
•
•
•
•
•
•
The instructions requested that the sample
members indicate their opinion of the
legality of each activity on a five-point scale
that was anchored by the descriptors
"obviously illegal", "probably illegal", "gray
area", "probably legal", and "obviously
legal" assessed against federal legislation.
The sample members were only requested to
respond to the legality issue. They were not
required to assess the extent to which the
activities were ethical or socially responsible.
Predatory pricing
Agreeing to divide market with rivals
Exercising surveillance over who
supports a union formation
Telling customers they are getting a
price break when this is untrue
Agreeing with distributors on the
prices they will charge
Pre-empting potential competition
with prices below costs
Inducing price discrimination
Making sales forecasts based upon
managerial judgment
Seven of the inaccurately-evaluated activities
are illegal, but the members of the sample
classified them as legal. On the other hand,
only one was legal but was categorized as
illegal. It appears that the primary distortion
is in the nature of being unaware of federal
prohibitions,
rather
than
inaccurately
concluding that certain activities are not in
conformity.
The first hypothesis held that the C.E.O. 's, as
a group. could accurately assess the legal
status of fifty percent or more of the twenty
activities. Fifty percent was selected because
it is the most neutral proportion available
and, by default, marks the mid-point between
what might be construed as "naive" on the
one hand and "knowledgeable" on the other.
This percentage has been utilized in other
studies of perceptions of the legality of
business activities (Peterson, 1998 ).
The C.E.O. 's were able to make accurate
classifications for twelve activities. Hence,
they correctly categorized sixty percent of
the legality relationships, which furnishes a
measure of defense for hypothesis one.
However, their collective response was
inaccurate in forty percent of the cases, and
most of these inaccurate perceptions are in
the domain of regulations that are associated
with strong penalties, including substantial
fines, restnct1ve injunctions, and even
possible imprisonment.
Quantitative values were assigned to each of
the five portions of the scale, and these
values ranged from five (for "obviously
illegal") to one (for "obviously legal"). The
values which were allocated to each class
were multiplied by their frequencies and
divided by the number of respondents to
yield arithmetic means for each of the twenty
activities. Thus, a mean value of four for a
particular activity signaled that the sample
members believed the activity was "probably
illegal." The mean values for each of the
twenty activities are set forth in Table 1.
All but two of the inaccurate perceptions
relate to antitrust legislation, assuming that
the Federal Trade Commission Act is
included in that assortment. Since antitrust
laws can dictate substantial penalties,
inaccuracies pertaining to these statutes can
be extremely expensive to the firm.
Five of the activities which the members of
the sample perceived inaccurately pertain to
pricing. This suggests that the C.~.O:'s are
less than fully cognizant on the leg1slatJon
44
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Vol. 16. No. 1Spring/Summer2005
Journal of Small Business Strategv
Table I - Respondent Belief of the Legality of Specified Activities
Mean
Scale
Value
3.7
4.0
2.4
1.8
2.2**
1.9
4.1
2.2
3.1
2.4**
2.0**
2.3 **
3.1
2.5
2.3
2.2**
2.0**
2.3**
3.1
3.8**
Activity*
Actual
Legal
Status
Illegal
Illegal
Legal
Legal
lllegal
Legal
Illegal
Legal
Legal
Illegal
Illegal
Illegal
Legal
Legal
Legal
lllegal
Illegal
Illegal
Legal
Legal
Refusing to hire job applicants who are over age 45
Price collusion with competitors
Charging higher prices than rivals
Hiring only experienced help
Predatory pricing
Informing a debtor that legal action may be pursued
Discharging an employee for filing an OSHA complaint
Charging the same price to similar buyers
Suggesting that customers buy an item now
Agreeing to divide market with rivals
Exercising surveillance over who supports a union formation
Telling customers they are getting a price break when this is untrue
Selling a low quality product
Aiming the marketing effort only on larger customers
Selling products in throw-away non-degradable containers
Agreeing with distributors on the prices they will charge
Preempting potential competition with prices below costs
Inducing price discrimination
Promoting only experienced people into management jobs
Making sales forecasts based upon managerial judgment
*The actions were described in detail in the questionnaires
**Signifies that respondents' mean scale value on an activity was in error, as regards legal
status. Significant differences between mean scale values and 3.0 were assessed by Tukey K
tests at the .05 level.
which relates to this function . Yet, pncmg
serves as an important ingredient in the
marketing strategies of numerous small
business manufacturers (Busch & Tincher,
1998).
The data in Table 2 provide support for the
second hypothesis. Both consumer and
industrial good C.E.O. 's were incorrect in
judging eight activities. In five of these,
however, the difference between the mean
scale values of the two groups is statistically
significant. And, in each of these, the
consumer goods C.E.O. 's mean scale values
are closer to the actual legal status value than
are the industrial goods C.E.O.s. Further,
there are two activities for which both groups
of executives made correct legal judgments,
but there is a statistically significant
difference between the mean scale values of
both groups. In both of these cases, the
consumer goods mean scale value is closer to
the actual legal status value. Based upon this
data, it is reasonable lo conclude that the
consumer goods C.E.O. possessed the highest degree of knowledge of the federal laws.
A second portion of the study involved
assessing the dependent variable by the
nature of the offerings of the firm industrial and consumer goods. It was
hypothesized that managers employed by
consumer goods firms would be more
accurate in assessing legality than producers
of industrial goods. Table 2 presents the
relevant data. As in the case of Table 1,
Tukey K tests were employed to assess the
data among the columns. A similar test was
utilized to measure the significance of the
differences between mean scale values of
producers of consumer and industrial goods.
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Journal of Small Business Strategv
Vol. 16, No. 1Spring/Summer2005
Table 2 - Respondent Belief of the Legality of Specified Activities, by Type of Firm
Activity*
Mean Scale
Value
Cons.
Goods
3.9
4.3
2.3
2.0
2.4**
1.9
4.3
2.1
3.0
2.6**
1.9**
2.4**
Actual
Legal
Status
lndust.
Goods
3.6
3.4"
2.6
1.7
1.8**"
1.9
4.0
2.4
3.3
2.0**"
2.3**
2.1 **
Refusing to hire iob aoolicants who are over age 45
Illegal
Price collusion with competitors
Illegal
Charging higher prices than rivals
Legal
Hiring only experienced help
Legal
Predatory pricing
Illegal
Informing a debtor that legal action may be pursued
Legal
Discharging an employee for filing an OSHA complaint
Illegal
Charging the same price to similar buyers
Legal
Suggesting that customers buy an item now
Legal
Agreeing to divide market with rivals
lllegal
Exercising surveillance over who suooorts a union formation
Illegal
Telling customers they are getting a price break when this is
lllegal
untrue
Selling a low quality product
Legal
3. 1
3.1
Aiming the marketing effort only on larger customers
2.2
Le!!al
2.8"
Selling products in throw-away non-degradable containers
2.0
2.5
Le!!al
Agreeing with distributors on the prices they wi ll charge
2.5**
1.5**" llle!!al
Preempting potential competition with prices below costs
2.2**
1.6**" Illegal
Inducing price discrimination
2.5**
I. 7**" Illegal
Promoting only experienced people into management iobs
Legal
3.1
3.2
Making sales forecasts based upon managerial iudgment
Legal
3.8**
3.8**
*The actions were described in detail in the questionnaires
**Signifies that respondents ' mean scale value on an activity was in error, as regards legal
status. Significant differences between mean scale values and 3.0 were assess by Tukey K
tests at the .05 level.
" Signifies that action mean scale values for consumer and industrial goods producers are
significantly different.
DISCUSSION
The objective of this study was to assess the
extent to which a sample of small
manufacturing company C.E.O.'s were able
to accurately distinguish legal and illegal
activities, as they are set forth in federal
legislation. For the sample at large, the
managers were able to accurately designate
the legality of the activities in sixty percent
of the cases. A contrast between the C.E.O. 's
of industrial goods and consumer goods
small manufacturing fim1s suggested that
consumer goods managers were more
accurate in classifying legal and illegal
activities than were industrial goods
managers.
The results of the inquiry signify that some
C.E.O. 's of small manufacturing firms,
especially those producing industrial goods,
may be in need of further training and
education in federal supervision of their
practices. If these companies do not acquire
further knowledge, they and their top
administrators are vulnerable to prosecution
by the government and lawsuits imposed by
competitors, customers, suppliers, distributors, unions, employees, and others.
The present inquiry concentrated on federal
regulation. It is highly possible, however,
that the managers are just as ill-informed on
the legitimacy of business activities, relative
to state and local laws. Additional studies
46
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Vol. 16, No. 1 Spring/Summer 2005
Journal of Small Business Strategy
that assess the degree of managerial
comprehension of these restraints could be of
value.
C.E.O.'s in these companies could benefit
through assessing the extent to which they
are familiar with federal, state, and local law.
Other regulations, beyond those examined in
this study, could be evaluated through the
measurement endeavor, depending on the
specific legal environment which the
company faces. If the measurement effort
uncovers gaps in knowledge, remedial
efforts can be instigated to improve upon the
state of knowledge. These efforts could
include consultations with well-informed
attorneys,
enrolling in classes
and
management development seminars, and
reviewing business law literature. The
outcome of carefully planned measures could
be business decisions that are more
compatible with the inevitable accretion m
the intensity and latitude of regulation.
In addition to acquainting themselves about
pertinent regulation, C.E.O. 's of small
manufacturing firms can benefit through
initiating procedures designed to familiarize
key employees with this subject matter. Key
employees may pursue strategies and tactics
that are not congruent with the law, thereby
placing the firm in a vulnerable position.
Hence, they should have knowledge of the
laws and be cognizant that top management
is heavily motivated to comply with the law.
Management is well advised to assess the
degree of legal knowledge possessed by key
employees and to consider means of edifying
these individuals, should they be deficient in
legal knowledge. If they are not wellinformed, their performance may have to be
carefully monitored and corrected, and this
can be a time consuming activity that is
nonnally beyond the province of top
management responsibility.
Experience indicates that formal legal
compliance management programs can be
very useful in directing the behavior of
employees. These focus on awareness of
legal issues. Regardless of their values,
employees cannot be expected to be
intimately familiar with all of the laws and
regulations that influence their work.
However, if employees are aware of relevant
legal issues, they are more likely to raise the
right questions and ultimately do the right
thing when faced with a dilemma. Often,
employees do the wrong thing simply
because they are unaware - they do not
know that they should be concerned or ask
for help. Effective legal compliance
management can increase employee legal
issue awareness (Pruzan, 1998).
Legal compliance programs can be designed
with different orientations. One orientation is
a compliance-based approach, which focuses
mainly on preventing, detecting, and
punishing violations of the law. Another
orientation - the values-based approach attempts to define company values and
encourage employee commitment to ethical
aspirations. The values based approach can
be advantageous since it is based on personal
self-governance and is more likely to
motivate employees to behave in accordance
with shared values rather than avoiding
punishment (Paine, 1994 ).
Under a value-based approach, the spirit of
the law is a more stringent standard than the
letter of the law (one does not seek to exploit
potential loopholes discovered in the law).
First management clearly and fully
communicates the guiding values and
commitments of the firm. All employees are
urged to take these guidelines seriously and
be comfortable with dialogue surrounding
them. Management is personally committed
to these values and is willing to act
accordingly. In tum, managers are willing to
review and assess their own behavior.
Consistency in decision-making is essential
to avoid employee cynicism and rejection of
the compliance program (Joyner, Payne, &
Raibom, 2002).
When employees realize that they are facing
a legal compliance issue, effective
compliance management should make it
more likely that the employees would ask for
help and guidance within the finn. Many
compliance managers devote much of their
time responding to questions regarding
company policy and the law. Providing good
advice early can solve problems early and
provide employees with accurate guidance
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Vol. 16, No. I Spring/Summer 2005
Journal o(Small Business Strategi·
on company policies and the law. It can also
furnish input that may be employed to plan
future training needs or revisions in ethical
codes (Gaumnitz & Lere, 2002; Emmelhainz
& Adams).
Ideally, the legal compliance program is
perceived by employees as concentrating on
shared organizational values and guiding
employees to act on their aspirations. Such
programs motivate employees to be aware of
legal issues, report bad news to management,
and refrain from engaging in illegal conduct.
This can reduce illegal behavior, enhance
employee
commitment,
and
generate
employee perceptions that decision making
in the company is better because of the legal
compliance program. The program can be
supplemented with an orientation toward
satisfying external constituencies. Valuing
external stakeholders, such as customers and
the public at large can exert a positive impact
on all outcomes (Trevino, Weaver, Binson,
& Toffler, 1999).
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APPENDIX
Description of the Activities Covered
I.
Refusing to hire job applicants who
are over age 45. Extending a policy
where no individual who is 45 years of
age are older will be hired for a given
job category.
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Journal o(Small Business Strategi 1
Vol. 16, No. 1Spring/Summer2005
2.
Price collusion with competitors.
Making agreements with rival manufacturers which stipulate the prices
each competitor will charge to its
customers.
12. Telling customers they are getting a
price break when this is untrue.
Falsely informing customers that they
are receiving a price that is lower than
that charged to other customers.
3.
Charging higher prices than rivals.
Assessing company customers higher
prices than those assessed by competitors to their customers.
13. Selling a low quality product. Sell a
product that is inferior in performance,
materials, or workmanship to products
sold by competitors.
4.
Hiring only experienced help. Hiring
only those job applicants who have
personal experience in manufacturing
work.
5.
Predatory pricing. Setting company
prices at low levels in order to drive
competitors out of business.
6.
7.
8.
9.
Informing a debtor that legal action
may be pursued. Telling a debtor, by
telephone or letter, that if a past-due
account is not settled, legal proceedings
may be put into motion.
Discharging an employee for filing an
OSHA complaint. Firing an employee
because that individual has filed a
complaint with the Occupational Safety
and Health Administration regarding an
unsafe practice or facility at work.
Charging the same price to similar
buyers. Charging identical prices to
different company customers when
these customers are essentially alike in
terms of the cost of serving them.
Suggesting that customers buy an
item now. Urging immediate purchase
as prices may rise sometime in the
future.
10. Agreeing to divide the market with
rivals. Reach an agreement whereby
you will not compete for certain
customers reserved for competitors and
they will not compete for certain
markets reserved for your finn.
11. Exercising surveillance over who
supports a union formation. When
efforts are being made to form a union
in your plant, undertaking to discover
which employees are in favor of the
um on.
14. Aiming the marketing effort only on
larger customers. Concentrating your
marketing personnel and activities on
satisfying the needs of your larger
customers.
15. Selling products in throw-away nondegradable containers. Selling goods
in packages that will not break down
into natural commodities in a reasonable
period of time.
16. Agreeing with distributors on the
prices they will charge. Entering into
contracts with distributors whereby the
distributor agrees to sell your items at
the prices you have specified.
17. Prempting potential competition with
prices below costs. Keeping new firms
from entering your market by pricing
below costs, making it impossible for
new firms to
make a profit.
18. Inducing price discrimination. Persuading a supplier to sell goods to you
at a lower price than that paid by a
similarly situated competitor.
19. Promoting only
into managerial
managerial level
have extensive
company.
experienced people
jobs. Promoting into
jobs only those who
experience with the
20. Making sales forecasts based upon
managerial judgment. Preparing sales
forecasts that are based upon the
experience and judgment of management, rather than upon mathematical
calculations.
50
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